For years, Microsoft's Xbox division has largely remained in the background compared to its competitors. However, interest in the gaming business has picked up in recent months, driven largely by its new CEO, Asha Sharma, who recently announced plans to eliminate 3,200 jobs across the division.
In an internal memo, Sharma described the move as the "most significant restructure in Xbox history." She announced that 1,600 employees would be laid off immediately on July 6, with another 1,600 positions set to be cut over the next 12 months. The layoffs form part of a broader Microsoft restructuring that will affect around 4,800 employees.
Since succeeding Microsoft veteran Phil Spencer as Xbox chief in February this year, Sharma has introduced a series of major changes across the gaming business.
Who is Asha Sharma?
Asha Sharma was born in 1989 in Racine, Wisconsin, in the United States. Following her parents' divorce, she was raised by her mother, who worked at a department store. During her teenage years, Sharma also worked at a golf course.
She earned a Bachelor of Science degree in business from the Carlson School of Management at the University of Minnesota in 2011. While at university, she also led a community programme for at-risk teenagers in Brooklyn.
After graduating, Sharma joined Microsoft's marketing division, where she spent two years. In 2013, she became Chief Operating Officer at Porch Group, a role that later earned her a place on Forbes' 30 Under 30 list.
Four years later, she joined Meta, where she worked on products for creators, developers and digital platforms, including teams behind Messenger and Instagram Direct.
In 2021, Sharma became Chief Operating Officer at Instacart and remained with the company through its public listing in 2023.
She returned to Microsoft in 2024 as President of CoreAI Product, overseeing Azure AI, machine learning systems and other artificial intelligence products, before being appointed Executive Vice President and CEO of Microsoft Gaming, now rebranded as Xbox, in February this year.
Sharma has also served on the boards of The Home Depot and Coupang.
Leading an Xbox reset
The latest round of layoffs is part of a broader restructuring effort that Sharma has described as the "Xbox reset."
In her message to employees, she acknowledged that the job cuts were difficult but necessary, saying Xbox was not delivering the expected financial performance.
"Our business is not healthy," Sharma wrote, adding, "These changes are about a bigger future for Xbox, not a smaller one."
Alongside the workforce reduction, Xbox also plans to spin off five game development studios currently operating under the company.
Sharma has also announced that two of Xbox's most successful businesses—Minecraft developer Mojang and Candy Crush maker King—will now report directly to her.
Before the latest restructuring, Sharma had already attracted attention among Xbox fans through several high-profile decisions.
One of her first moves after taking charge was to rename Microsoft Gaming back to Xbox, a decision that was widely welcomed by the gaming community.
Announcing the change, Sharma said, "We are going back to where we started and changing our team's name. We are Xbox."
She added, "We're a challenger, and meeting this moment will require pace, energy, and a level of self-critique that should feel uncomfortable."
The rebranding also introduced a new bright green Xbox logo.
During Xbox FanFest in June, Sharma surprised attendees by giving every participant a special-edition Xbox Series X25 console.
She has also teased the company's next-generation gaming console, codenamed Project Helix, while ending the controversial "This is an Xbox" campaign.
In April, Sharma reduced the price of Xbox Game Pass, Microsoft's game subscription service. However, the lower-priced tier no longer includes day-one access to Call of Duty.
